Transition bond

Transition bonds are a category of ESG bonds, the purpose of which is to finance the transition of the issuing company to more environmentally friendly activities. Such goals can be achieved by reducing carbon dioxide emissions into the atmosphere or otherwise reducing the harm caused by the issuer’s activities to the environment.

Transition bonds do not oblige the issuer or the funded project to meet the "green" criteria, but the funds raised through the placement of bonds must be directed to targeted transitional projects. Therefore, issuers that do not qualify for the issuance of green bonds can still raise financing related to the sustainable development sector by issuing bonds in this category.

The first Russian issue of transitional bonds was the placement of Ink-Capital, the holding company of GK INK, which is engaged in exploration and mining. The purpose of the placement was to refinance the costs of the project for the reinjection of gas into the reservoir at the field.